Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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No, it’s not your imagination. The upper 1% really are screwing you more.

The Gini ratio measures income inequality. A Gini of zero would show perfect equality where everyone has the same income. A Gini of 100 (percent), would show maximum inequality, where only one person receives all the income.

Here is what has happened in the U.S.:

The above graph shows inequality in the U.S. has risen dramatically during the past 45 years.

The only nations with greater income inequality are shown in orange, red and brown.

Specific numbers for Europe are:Not one European nation is as unequal as the United States.
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Advice to the upper 1%
Ten suggestions about how to screw the lower 99% even more, and increase the income gap

1. Maintain or even increase the FICA tax. This tax directly punishes lower salaried people. Institute a national sales tax or VAT. Poorer people devote a greater percentage of their income on consumption.

2. To “save” Social Security, tell the 99% it’s insolvent, so you must reduce benefits and continue to increase the SS starting age. Also, continue to tax SS benefits, as these benefits are most important to lower income people.

3. To “save” Medicare, tell the 99% it’s insolvent, so you must reduce payments to doctors, hospitals and other health care providers. That way, more of the best doctors will opt for “boutique” practices that only the 1% can afford. Don’t pay for expensive procedures (that only the rich can manage).

4. Cut military spending. The military employs the 99%. Military equipment production companies provide jobs to the 99%. Keep cutting postal and other government employment. Also cut domestic spending, as the vast majority of domestic spending benefits the 99%.

5. “Broaden” the income tax base by increasing the number of lower income people forced to pay taxes. Continue the Alternative Minimum Tax (AMT); it catches more of the 99% every year, and the 1% know how to avoid it.

7. Cut financial assistance to the states. Virtually everything the states do benefits the 99%, and since the states are monetarily non-sovereign, they only can get money by taxing their own people, tourism or exports. The rich know how to avoid taxes. Tourism and imports mostly are inter-state money transfers.

8. Continue to spread the myth that the U.S. government is, or soon will be insolvent, like Greece, and that federal taxes pay for federal spending. These ideas confuse the 99% and give you a good excuse to cut anything that benefits them. Continue the federal debt limit exercise. Pretend federal finances are the same as personal finances.

9. Continue to allow banks to trade for their own accounts, and always bail them out when their investments go sour. Never accuse any banker of criminal activity. Banks are special.

10. Nominate more arch conservatives to the Supreme Court. Scalia, Alito and Thomas are good models. The “Citizens United” decision was an excellent step forward in providing the rich with greater power.

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4 Responses to –No, it’s not your imagination. The upper 1% really are screwing you more.

Looking at the first chart, it seems the inequality began to increase right after we achieved monetary soveriginity? I think that’s not the cause but the result of the 1% brainwashing the 99% to give up their share so that the 1% could increase the gap as quickly as possible.
Your comments on this please.
Thanks.

Unfortunately, I don’t know the Gini in earlier years, so it’s hard to say whether it ever once was even higher (maybe during the Great Depression??)

I doubt Monetary Sovereignty was the cause, though it could have contributed. By allowing the federal government to create more dollars, MS allowed the 1% to grab onto them. In short, the 1% saw an opportunity and took advantage of it.

This would be an interesting topic to investigate. Perfect for that super computer I argue for, because there are so many factors to consider.

As Roger said, we don’t have historical data for inequality, but my sense is that America was a land of inequality until the New Deal and the labor movement of the 30’s. I see our present inequality simply as natural return to the historical average as the New Deal and unions are incrementally killed off. Inequality is a predictable result of laissez faire capitalism.

To the extent that things began to unravel about the time we left the gold standard, I would point out that we left the gold standard in part because we began to run a trade deficit, and that the trade situation is hurting the middle class to this day, with good middle class jobs leaving the country and the Federal government not running a large enough deficit to compensate for the demand leakage. Complicated, perhaps, by the dollar being an unofficial reserve currency that refuses to devalue to adjust for the trade deficit.

I see you’ve added a couple of new Mitchell’s Laws. “The more budgets are cut and taxes increased, the weaker an economy becomes.” I would prefer to phrase it “the more the federal deficit is cut.” Taxes have a place, and selectively increasing them can serve a purpose, as long as deficit is large enough to compensate for demand leakages. Likewise, cutting non-productive expenditures is fine as long as the resulting deficit is large enough to compensate for demand leakages.

“Until the 99% understand the need for federal deficits, the upper 1% will rule.” I like that one, much truth to it.